From multibillion-dollar deals and renewed investment in AI networking to tech layoffs and grid bottlenecks, it’s been another busy stretch for the data center sector. Plus, which local municipality is the latest to ban data centers? Here’s a roundup of the news and developments shaping the industry.
AI Spending Sprees and Hyperscale Moves
Anthropic announced plans to spend $50 billion on U.S. AI infrastructure, starting with custom data centers in Texas and New York in partnership with Fluidstack, an AI cloud platform that supplies large-scale GPUs. Not to be outdone, Meta claimed in a blog post it will spend an enormous $600 billion on U.S. digital infrastructure by 2028. Facebook’s parent company, which posted annual revenue of $62.3 billion in 2024, didn’t disclose how it intends to secure or apply those funds.
Meanwhile, Microsoft signed a multi-billion-dollar GPU lease with Lambda, adding tens of thousands of GPUS – Nvidia GB300 NVL72 systems – to its AI arsenal. Over the past months, Microsoft has signed deals worth more than $33 billion across providers including Nebius, Nscale, CoreWeave, and Lambda.
In another notable move, Verizon Business is partnering with AWS to build long-haul, high-capacity fiber pathways with the aim of building out AI networking capacity and deploying AI workloads at scale.
Lastly, in global news, Microsoft is investing $10 billion in an AI hub in Portugal, deploying 12,600 NVIDIA GPUs in the city of Sines. Google is committing €5.5 billion in Germany to expand the data center and office footprint in the country, and Amazon is developing a new US-Ireland subsea cable, dubbed Fastnet, to boost transatlantic connectivity.
Outages and Layoffs
Even as new projects advance, infrastructure hiccups persist. Microsoft Azure suffered an outage in its West Europe region due to a “thermal event” affecting data center cooling systems. This comes after AWS experienced a major outage in late October, further raising concerns from experts on hyperscalers’ resilience planning and infrastructure.
At the same time, the tech layoffs continue. IBM reportedly plans to cut thousands of jobs to focus on software and AI growth, and Verizon is set to eliminate around 15,000 roles – its largest layoff in company history – as part of a CEO-led restructuring.
Energy Scarcity and Power Deals
In energy news, Amazon is accusing Oregon utility PacifiCorp of failing to deliver adequate power to its AWS data centers in the area, according to Bloomberg. One campus reportedly has “insufficient power,” another has none at all, and two more are stalled in contract purgatory. Amazon isn’t the only one dealing with grid connection issues: In Silicon Valley, two large data center campuses built by Digital Realty and Stack reportedly sit empty awaiting long-overdue grid upgrades that may not be ready until 2028. Digital Realty obtained planning permission for the data center in 2019, according to Bloomberg.
Meanwhile, in West Texas, Chevron is planning its first natural gas plant dedicated to the data center sector – set to provide 5GW of power. Elsewhere in the state, Fermi America secured preliminary approval to build 6GW of gas-based generation for its proposed 11GW mega-campus in Amarillo. And CyrusOne bolstered its Texas expansion with a 210MW energy deal with Calpine.
On the renewable side, Google continues to secure renewable energy through solar PPAs in Arkansas and Ohio.
U.S. Development and Pushback
Major U.S. site plans and expansions are also making headlines. Meta announced a $1 billion, 500-acre data center campus in Beaver Dam, Wisconsin – its first in the state – expected to come online in 2027. Google has also committed $40 billion to expand its AI infrastructure in Texas through 2027, across its existing data center campuses in Ellis County and three new campuses planned in Armstrong and Haskell Counties.
Meanwhile, Microsoft has officially launched its Atlanta Fairwater AI facility, featuring liquid cooling and UPS-free design, and Vantage Data Centers is breaking ground on a $2 billion, 192MW campus in Stafford County, Virginia. New Era is also planning a massive 7GW AI campus in New Mexico, powered by natural gas and nuclear energy.
One place data center operators won’t be breaking ground is in Lordstown, Ohio, which has officially banned data centers. Whilst Lordstown is not a data center hotspot, Ohio has seen a notable uptick in interest and investment in recent years. This comes as Microsoft’s own attorney recently acknowledged during a webinar, “Nobody really wants a data center in their backyard.” Policy friction is growing as well, with Kansas City officials criticizing tax incentives for the $100 billion Project Kestrel data center campus.
Innovation Picks: Optical and Quantum Projects
To close on a forward-looking note, optics startup Taara is rolling out the world’s first wireless optical mesh network in Rio de Janeiro, using free-space optics (FSO) laser technology to bridge connectivity gaps across the city and ensure affordable connectivity for essential services like education, health, public administration, and emergency situations. Launched in 2017, Taara is a moonshot project for connectivity at Google’s innovation hub, X.
Lastly, D-Wave is deploying an Advantage2 quantum computer for the U.S. Department of Defense in partnership with Davidson Technologies. It will eventually run sensitive applications ranging from logistics to national security.